mom and i sold houses together for over 22 years, until she retired in 2015. i have kept on selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :) www.tkmomteam.com

Monday, October 31, 2016

Taking the Fear out of the Mortgage Process

A considerable number of potential buyers shy away from jumping
into the real estate market due to their uncertainty about the buying
process. A specific cause for concern tends to be mortgage
qualification.

For many, the mortgage process can be scary, but it doesn’t have to be!

In order to qualify in today’s market, you’ll need to have saved for a down payment (the average down payment on all loans was 11% last month, with many buyers putting down 3% or less), a stable income and good credit history.
Throughout
the entire home buying process, you will interact with many different
professionals, all of which perform necessary roles. These professionals
are also valuable resources for you.
Once you’re ready to apply, here are 5 easy steps that Freddie Mac suggests to follow:

Find out your current credit history & score
– even if you don’t have perfect credit, you may already qualify for a
loan. The average FICO Score of all closed loans in September was 731, according to Ellie Mae.

Contact a professional
– your real estate agent will be able to recommend a loan officer that
can help you develop a spending plan, as well as determine how much home
you can afford.

Consult with your lender – he
or she will review your income, expenses, and financial goals in order
to determine the type and amount of mortgage you qualify for.

Talk to your lender about pre-approval
– a pre-approval letter provides an estimate of what you might be able
to borrow (provided your financial status doesn’t change), and
demonstrates to home sellers that you are serious about buying!

Bottom Line

Do
your research, reach out to professionals, stick to your budget, and be
sure that you are ready to take on the financial responsibilities of
becoming a homeowner.

Tuesday, October 25, 2016

Buying is Now 37.7% Cheaper Than Renting in the US

The results of the latest Rent vs. Buy Report from Trulia
show that homeownership remains cheaper than renting with a traditional
30-year fixed rate mortgage in the 100 largest metro areas in the
United States.
The updated numbers actually show that the range is
an average of 17.4% less expensive in Honolulu (HI), all the way up to
53.2% less expensive in Miami & West Palm Beach (FL), and 37.7%
nationwide!

Other interesting findings in the report include:

Interest
rates have remained low, and even though home prices have appreciated
around the country, they haven’t greatly outpaced rental appreciation.

Home
prices would have to appreciate by a range of over 23% in Honolulu
(HI), up to over 45% in Ventura County (CA), to reach the tipping point
of renting being less expensive than buying.

Nationally, rates
would have to reach 9.1%, a 145% increase over today’s average of 3.7%,
for renting to be cheaper than buying. Rates haven’t been that high
since January of 1995, according to Freddie Mac.

Bottom Line

Buying
a home makes sense socially and financially. If you are one of the many
renters out there who would like to evaluate your ability to buy this
year, let’s get together to help you find your dream home.

Monday, October 24, 2016

Appraisers & Homeowners Don’t See Eye-To-Eye on Values

In today’s housing market, where supply is very low and demand is very high,
home values are increasing rapidly. Many experts are projecting that
home values could appreciate by another 5%+ over the next twelve months.
One major challenge in such a market is the bank appraisal.
If
prices are surging, it is difficult for appraisers to find adequate,
comparable sales (similar houses in the neighborhood that closed
recently) to defend the selling price when performing the appraisal for
the bank.
Every month, Quicken Loans measures the disparity between what a homeowner believes their house is worth as compared to an appraiser’s evaluation in their Home Price Perception Index (HPPI). Here is a chart showing that difference for each of the last 12 months.

Bottom Line

Every
house on the market has to be sold twice; once to a prospective buyer
and then to the bank (through the bank’s appraisal). With escalating
prices, the second sale might be even more difficult than the first. If
you are planning on entering the housing market this year, let’s get
together to discuss this, and any other obstacle that may arise.

Tuesday, October 18, 2016

Don’t Disqualify Yourself… Over Half of All Loans Approved Have a FICO Score Under 750

The results of countless studies have shown that potential home
buyers, and even current homeowners, have an inflated view of what is
really required to qualify for a mortgage in today’s market.
One such study by the Wharton School of Business at the University of Pennsylvania,
revealed that many Millennials have not yet considered purchasing a
home, simply because they don’t believe they can qualify for a mortgage.
The article quoted Jessica Lautz, the National Association of Realtors’ Managing Director of Survey Research, as saying that there is a significant population that does not think they will be approved for a mortgage and doesn’t even try. The article also quoted Fannie MaeCEO Tim Mayopoulos:

“I
do think that there’s a sense out there in the marketplace among
borrowers that credit may not be available, especially for people with
lower credit scores.”

Ellie Mae’s Vice President, Jonas Moe recently encouraged buyers to know their options before assuming that they do not qualify for a mortgage:

“Many potential home buyers are 'disqualifying' themselves. You don't need a 750 FICO Score and a 20% down payment to buy.”

So what credit score is necessary?

Below is a breakdown of the FICO Score Distribution of all closed (approved) loans in August from Ellie Mae’s latest Origination Report.
Over
50% of all approved loans had a FICO Score under 750. Many potential
home buyers believe that they need a score over 780 to qualify.

Bottom Line

If
owning a home of your own has always been a dream of yours and you are
ready and willing to buy, find out if you are able to! Let’s get
together to determine if your dreams can become a reality sooner than
you thought!

Tuesday, October 11, 2016

3 Questions to Ask Before Buying Your Dream Home

If you are debating purchasing a home right now, you are probably
getting a lot of advice. Though your friends and family will have your
best interest at heart, they may not be fully aware of your needs and
what is currently happening in the real estate market.
Ask yourself the following 3 questions to help determine if now is actually a good time for you to buy in today’s market.

1. Why am I buying a home in the first place?

This
truly is the most important question to answer. Forget the finances for
a minute. Why did you even begin to consider purchasing a home? For
most, the reason has nothing to do with money.
For example, a recent survey by Braun showed that over 75% of parents say “their child’s education is an important part of the search for a new home.”
This survey supports a study by the Joint Center for Housing Studies at Harvard University which revealed that the four major reasons people buy a home have nothing to do with money. They are:

A good place to raise children and for them to get a good education

A place where you and your family feel safe

More space for you and your family

Control of that space

What
does owning a home mean to you? What non-financial benefits will you
and your family gain from owning a home? The answer to that question
should be the biggest reason you decide to purchase or not.

2. Where are home values headed?

According to the latest Home Price Index from CoreLogic, home values are projected to increase by 5.3% over the next 12 months.

What does that mean to you?

Simply
put, if you are planning on buying a home that costs $250,000 today,
that same home will cost you an additional $13,250 if you wait
until next year. Your down payment will need to be higher as well to
account for the higher home price.

3. Where are mortgage interest rates headed?

A
buyer must be concerned about more than just prices. The ‘long term
cost’ of a home can be dramatically impacted by even a small increase in
mortgage rates.
The Mortgage Bankers Association (MBA), the National Association of Realtors, Fannie Mae and Freddie Mac have all projected that mortgage interest rates will increase over the next twelve months as you can see in the chart below:

Bottom Line

Only
you and your family will know for certain if now is the right time to
purchase a home. Answering these questions will help you make that
decision.

Wednesday, October 5, 2016

Have You Put Aside Enough for Closing Costs?

There are many potential homebuyers, and even sellers, who believe
that you need at least a 20% down payment in order to buy a home, or
move on to their next home. Time after time, we have dispelled this myth
by showing that there are many loan programs that allow you to put down
as little as 3% (or 0% with a VA loan).
If you have saved up your
down payment and are ready to start your home search, one other piece
of the puzzle is to make sure that you have saved enough for your
closing costs.Freddie Macdefines closing costs as:

“Closing
costs, also called settlement fees, will need to be paid when you
obtain a mortgage. These are fees charged by people representing your
purchase, including your lender, real estate agent, and other third
parties involved in the transaction. Closing costs are typically between 2 and 5% of your purchase price.”

We’ve
recently heard from many first-time homebuyers that they wished that
someone had let them know that closing costs could be so high. If you
think about it, with a low down payment program, your closing costs
could equal the amount that you saved for your down payment.
Here
is a list of just some of the fees/costs that may be included in your
closing costs, depending on where the home you wish to purchase is
located:

Government recording costs

Appraisal fees

Credit report fees

Lender origination fees

Title services (insurance, search fees)

Tax service fees

Survey fees

Attorney fees

Underwriting fees

Is there any way to avoid paying closing costs?

Work
with your lender and real estate agent to see if there are any ways to
decrease or defer your closing costs. There are no-closing mortgages available,
but they end up costing you more in the end with a higher interest
rate, or by wrapping the closing costs into the total cost of the
mortgage (meaning you’ll end up paying interest on your closing costs).
Home
buyers can also negotiate with the seller over who pays these fees.
Sometimes the seller will agree to assume the buyer’s closing fees in
order to get the deal finalized.

Bottom Line

Speak
with your lender and agent early and often to determine how much you’ll
be responsible for at closing. Finding out you’ll need to come up with
thousands of dollars right before closing is not a surprise anyone is
ever looking forward to.

Tuesday, October 4, 2016

Strong Buyer Demand Continues to Outpace Inventory of Homes for Sale

The price of any item is determined by the supply of that item, as well as the market demand. The National Association of REALTORS (NAR) surveys “over 50,000 real estate practitioners about their expectations for home sales, prices and market conditions” for their monthly REALTORS Confidence Index.
Their latest edition sheds some light on the relationship between Seller Traffic (supply) and Buyer Traffic (demand).

Buyer Demand

The map below was created after asking the question: “How would your rate buyer traffic in your area?”
The
darker the blue, the stronger the demand for homes in that area. Only
four states came in with a weak or moderate demand level.

Seller Supply

The Index also asked: “How would your rate seller traffic in your area?”
As
you can see from the map below, the majority of the country has weak
Seller Traffic, meaning there are far fewer homes on the market than
what is needed to satisfy the buyers who are out looking for their dream
homes.

Bottom Line

Looking
at the maps above, it is not hard to see why prices are appreciating in
many areas of the country. Until the supply of homes for sale starts to
meet the buyer demand, prices will continue to increase. If you are
debating listing your home for sale, let’s get together and discuss the
demand in our area.

Monday, October 3, 2016

Think You Should FSBO? 5 Reasons to Think Again!

In today’s market, with home prices rising and a lack of inventory,
some homeowners may consider trying to sell their home on their own,
known in the industry as a For Sale by Owner (FSBO). There are several reasons why this might not be a good idea for the vast majority of sellers.
Here are the top five reasons:

1. Exposure to Prospective Buyers

Recent
studies have shown that 88% of buyers search online for a home. That is
in comparison to only 21% looking at print newspaper ads. Most real
estate agents have an internet strategy to promote the sale of your
home. Do you?

2. Results Come from the Internet

The
days of selling your house by just putting up a sign and putting it in
the paper are long gone. Having a strong internet strategy is crucial.

3. There Are Too Many People to Negotiate With

Here is a list of some of the people with whom you must be prepared to negotiate if you decide to For Sale By Owner:

The buyer who wants the best deal possible

The buyer’s agent who solely represents the best interest of the buyer

The buyer’s attorney (in some parts of the country)

The home inspection companies, which work for the buyer and will almost always find some problems with the house

The appraiser if there is a question of value

4. FSBOing Has Become More And More Difficult

The
paperwork involved in selling and buying a home has increased
dramatically as industry disclosures and regulations have become
mandatory. This is one of the reasons that the percentage of people
FSBOing has dropped from 19% to 8% over the last 20+ years.

The 8% share represents the lowest recorded figure since NAR began collecting data in 1981.

5. You Net More Money When Using an Agent

Many
homeowners believe that they will save the real estate commission by
selling on their own. Realize that the main reason buyers look at FSBOs
is because they also believe they can save the real estate agent’s
commission. The seller and buyer can’t both save the commission.
Studies have shown that
the typical house sold by the homeowner sells for $210,000, while the
typical house sold by an agent sells for $249,000. This doesn’t mean
that an agent can get $39,000 more for your home, as studies have shown
that people are more likely to FSBO in markets with lower price points.
However, it does show that selling on your own might not make sense.

Bottom Line

Before
you decide to take on the challenges of selling your house on your own,
sit with a real estate professional in your marketplace and see what
they have to offer.

Lake County Illinois Homes' Facebook Page

About Me

i am a mom. and a wife. and a realtor. when i grow up i want to spend all day taking pictures and then spend all night looking at them. in the meantime, i am going to keep selling houses. for sellers who are moving on, and to buyers who are moving in. real estate is such a part of our daily lives, that it carries over into everything we are. and it is of interest to so many people. so i thought i would start talking. who knows...i may actually find that i have something interesting to say :)